Northern Governors Receive Criticism for Rejecting Tinubu's 'Tax Reform Bill'

The Northern Governors Forum on Wednesday faced massive backlash following their rejection of President Bola Tinubu's proposed 'Tax Reform Bill.'

The bill, which includes the Nigeria Tax Bill 2024 and the Tax Administration Bill, aims to provide a comprehensive fiscal framework for taxation in Nigeria. It also seeks to establish the Nigeria Revenue Service and create a tax tribunal and ombudsman.

The Northern Governors' opposition stems from concerns about the proposed changes to the Value Added Tax (VAT) distribution model, which they believe could disadvantage the northern region.

The governors argue that companies remit VAT based on the location of their headquarters rather than where goods and services are consumed, potentially leading to an inequitable distribution of resources.

Dr. Agabi Emmanuel, President of the Arewa Civil Rights Movement, criticized the governors' stance, describing it as "ill-conceived" and suggesting it portrays the North in a "beggarly light." He urged the northern states to view the reform as an opportunity to foster business growth rather than resist it under the guise of regional disadvantage.

The contentious VAT proposal would reduce the federal government’s share from 15% to 10%, with a portion allocated to states under a formula encouraging local investment. Critics of the Northern Governors' decision emphasize the need for the region to embrace a more business-friendly environment to stimulate economic growth.

Despite the governors' concerns, President Tinubu has expressed confidence that the bills will enhance taxpayer compliance, strengthen fiscal institutions, and foster a more effective and transparent fiscal regime, ultimately stimulating the economy. The debate continues as the bills await consideration in the National Assembly.